Banks are still "too big to fail", says SNB chairman

ZURICH, Sept 14 (Reuters) - More still needs to be done to
let global banks be wound down without harming the wider
economy, Swiss National Bank Chairman Thomas Jordan said in a
newspaper interview published on Saturday.

Authorities have been grappling since the collapse of U.S.
investment bank Lehman Brothers five years ago with the question
of how banks regarded as systemically important, or
too-big-to-fail, can be recapitalised without causing panic or
needing taxpayer cash.

After Switzerland's biggest bank UBS had to be
bailed out by the government in 2008, Swiss regulators have
implemented tough new capital requirements for banks, which go
beyond the rules stipulated by Basel III.

"If the winding down isn't possible then the buffers will
have to be raised accordingly," said Jordan, adding there were
several possibilities including contingent-convertible bonds.

In its yearly stability report published in June, the SNB
urged UBS and Credit Suisse to further
improve their leverage ratios. The Swiss financial market
regulator requires a leverage ratio of 4.3 percent by 2019.

"What matters now is that banks implement the respective
requirements consistently and rapidly," Jordan said. "Whether
further measures will be necessary depends above all on whether
the goal of an orderly winding down of major international banks
is achieved."

Jordan said he did not think it would be better to separate
investment banking from retail banks.

"As long as banks have sufficiently high equity capital and
a structure that lets them be unwound at their disposal, they
can choose their preferred business strategy themselves," he
said.